communications stored on servers on cruel and so on. >> but once they start to then they can listen to. >> with a started working on this long time ago from the state department they kept talking about the bit bucket. what the heck it? . .1@3@office.

he runs teams of nearly 40 clear that russian array back and the other linguists and analysis

performing open source research for the u.s. government. he is also the author of chinese industrial as nice as well. yankee. >> thank you, sir. i like to think the commission and think it's the staff with whom i have worked for so many years on these problems, particularly on this issue. i bring a lot of perspectives to this issue, one being a chinese linguist. as you said 20 years ago, building teams doing open sort of trance source research and working on chinese censors the issues with this commission. and the perspective of being a victim of these attacks given my own profile and writing than trying to expel chinese attackers from the ramparts of my own corporate networks on a daily basis. we talked a lot about this in the last six to nine months and i would say that it's a multifaceted issue and there is not a one-size-fits-all answer

to it. i like to highlight five different areas of cyberespionage, which are different and acquired different strategies. i think it is important for us not to treat it this way but to break it into pieces. the first category is frankly the government military classified contractor of espionage. very few options exist in this case. countries will always find each other. we cannot legislate against espionage or treason against it. but it's important to note that we since 1996, i have personally watched chinese intelligence preparation monitoring u.s. military asset movements and getting into on classified pentagon networks to get into the databases and provide for teaching real-time intelligence to chinese leaders about our dialogues with them and stealing the talking points about the

meetings and getting into a lot of classified contractor companies, stealing information and then using that information to fine-tune their own defensive systems. almost immediate benefit from stealing of information occurs. being able to operationalize it. on the commercial side is a little bit more complicated. on one hand we have sensitive business information that you break into this suite of a major western oil company and you steal the dollar number and you hand it to your national offshore oil company in a bid underneath that. so there is an immediate benefit. the one that has been part of this has been the issue of intellectual property rights. a lot of companies do not self-report the intrusions and so we really don't have as much data as we would like. particularly data that shows us

the intrusions that steal intellectual property that has been given back to china and then given to a national champion in that sector who is successfully able to reverse engineering who can market -- and show it as a quantifiable loss of u.s. company market share in china and compete with them globally. there are very few cases where we have enough data to make that change. it is primarily because they're not really guidelines to self-report those problems. the sec has tightened up some guidelines about reporting loss of shareholder value. many feel that they are not properly indemnified from reporting now. in many ways, many of them are looking to congress for legislation that will provide them with the indemnification that they need to share information with the government without antitrust problems were clued with one another and share this with one another so that they can engage in collective

defense without legal jeopardy. we have begin began to talk to them in a serious fashion, particularly in the last six months. i think the president struck the right top-level tone of pointing out the following fact. not to educate them about whether this is happening or insult their intelligence about that. but to point out that the really strong pillar, particularly passes era has been the business and trade committee. that is what you hear the most complaining about how they can't make money in china and is part of the champions and how the ramp insider as they notched his reducing competitiveness and stealing core technologies. to emphasize as we have, this fundamentally threatens the bilateral trade relationship, which threatens china's overall economic development, which therefore threatens their social

stability among which is the number-one priority of the chinese government. that is the message that is getting through to the top leadership and hopefully will incentivize them along with a range of other measures and all sorts of other measures that we have against chinese companies engaged in this behavior that i think together could possibly stem the tide on this behavior, which is frankly draining the american economy. >> thank you. those companies that you mentioned, the same companies that really get the heavy lifting and pushing this through the united states house of representatives and playing the single a lot of ways. i have spent a lot of my time more than any other products and network and any state in

california and texas, state talking about all of this. i spent a lot of time. what you notice is that in terms of innovation and process innovation, it's so often takes place in this way. when the u.s. companies do the innovation and we brag about it often in ohio or anywhere else, the production has gone overseas and that happens in terms of process and product both. how did this work beyond that. talk that through how that exacerbates the opportunities that these companies have for that kind of intellectual property theft when they do it from cyberattacks here when they do it and are companies are actually overseas producing

this, if you would discuss that. >> is important to note why this is happening. for the first 25 years of chinese economic modernization in my view, china was content and we have seen a dramatic numbers of the magazines, this includes the tremendous gains that they have made. was a very shallow modernization . in roughly the 2000 from a chinese government with this issue and they said that this is not the kind of deep economic modernization that we want. we don't feel that it is developing mess and we are not innovating this was in china but we are assembling other people's stuff and re-exporting it. so roughly in 2005 and 2006, we came up with this idea that was mentioned earlier. if a large number of state policies from 2006 until 2020 from an immediate range plan and we try to emphasize that this is

going to be a large-scale government effort with billions of dollars. what they discovered is that this is an oxymoron akin to jumbo shrimp and military intelligence. and that is not how innovation actually happens. they were feeling some key sectors to be able to do that. the only place they could turn if they couldn't squeeze it out of the multinationals by forcing them to build these labs in china, if they couldn't squeeze it out of the companies and the increasingly forced by regulatory ministries who are partnered with those companies to squeeze that technology transfer out, the remaining option that they had was frankly to steal it. unlike 20 years earlier where he would've had to physically steal it from a plan, you would have had to smuggle the blueprints out of the shop and take this and run out the door with it. unfortunately our move towards putting all this information

online allow them to steal that at a great distance. so that would not have been true in a pre-internet era. now companies have been putting on that information online. that made it all that much easier for people to steal it. >> thank you, that was very helpful. senator, can you talk about your experience and your report and can you give his thoughts about senator levin's legislation we think we should do. >> well, the doctor put it correctly and he said that we are half blind at determining how much it really is and what is going on. because a lot of companies either see no point in saying they have been stolen from, or they think that it would be making it worse was able lose a market that they have in china.

i would say one of the first things that you want to do is to see to it that there is one department in office that is in charge of finding out the total scope of the problem. all of the various elements of the doctor has spoken about so that you as the policymakers know how big of a prominence. saying that we have given you a conservative estimate, i think it is low, but to a certain extent, i'm just guessing on that. we need to know what is going on and no one is really in charge of this at the present time. but from the point of view of that year, the cure is in creating internal lobbyists in china for obeying the law. there has got to be a group there that says we will be

better off befall a fair set of rules and they have now. there is no one there who says that now because it simply isn't true. stealing our intellectual property is very largely risk-free. but tying up the u.s. market, which is so important to them in one respect or another, it will be very important in creating a group that will say yes rather than smiling and nodding their heads down the same road. this is not a new problem. we were concerned about this a decade ago and even more about. that the chinese economy has changed its desires and it is becoming worse and not better. >> is a greater threat to our national security or economic security?

>> it is a major threat to national security. even the solutions i have suggested or as the senator has suggested, we only indirectly get it back. how you value the loss of the intellectual property that is important for national defense, it is not easy to determine in the degree to which you can punish them directly for that is hard to determine. but at one level at least, that is an important challenge for national security. the challenge is a major challenge. and something that we should attempt to cure right now. >> doctor, would you like to comment? >> they are inextricably linked

and we should see them that way as well. any decline in our economic security has an automatic implication for decline in our security. with respect to the chinese impacts our ability to enforce fairness on the chinese side with regards to economics. there are pieces of this and the chinese themselves write about their own comprehensive powers in a way that doesn't even make the distinction between the two and so talking to the senior leaders about the impact and economic development automatically to see the connection to the defense of their own country, as we should as well. i don't think anything is to be gained by separating issues and we have greater power to influence them by connecting them together and not allowing them to be treated separately. >> thank you, mr. chairman. as we look at the efforts to

address this, how are we doing with dhs and the fbi and others. are we working well together and can we improve that? >> we have some important and difficult themes that continue to redouble the way we do things. in other countries that don't have our particular legal and bureaucratic system think we have an advantage. struggle between domestic cybersecurity under dhs and where that boundary line is to not end on cybersecurity continues to be a point of fiction i have read multiple sources in which they talk about exploiting those things and the jurisdictional issues for their own advantage. one example is as early as 1996, internal chinese sources were talking about how they wanted to

delay or disrupt this could have on contingency by disrupting the pentagon's unclassified logistics computer system. but they said quite pointedly that they would initiate an attack from within the continental united states knowing that that would activate a different bureaucracy, mainly the fbi, and not the nsa and other people who had seen it as a foreign intelligence operation and in that window of us being screwed up and not knowing what was going on, they would be able to seize that strategic advantage. so i don't think that we are doing well on that front in particular, and i think even our adversaries are well aware of it. >> giving that understanding, i am not trying to get you out of your box, but how would you remedy that? >> many levels it is an indemnification issue. there are a lot of countries around the world to believe that

there is sovereignty and nations have boundaries and those boundaries can be protected. we have been arguing for internet freedom model that is fabulous. but all the talk about his sovereignty and they are frankly important with regards to cyberspace. we have to recognize that our best assets are the ones that are precluded from operating in the domestic united states. i realize this may not be the best time to raise that issue, given the news of the day. ultimately we would want to have our best capabilities in terms of defending the nation and those often reside with organizations that are not currently authorized and the only way that is when you get solved is to give people a the title x or title level that does

include this. >> thank you. senator? >> thank you again for your tremendous perception on this issue. you believe as i do that other believe that we are stopping the chinese with continuing theft and the leverage that we have is our market. we purchase far more than they purchase from us. and that is a tremendous leverage and it is the highest leverage that we have. by threatening that in a straightforward fashion, we will at least get them to begin to hear about what our concerns are and how to respond about. >> he said that american companies don't want to be public as much in coming out

with the recipient of cyber. what role do they have in protecting themselves? they have a tremendous role in protecting themselves. i think one of the reasons that many of them are reluctant is that they don't think anything is going to get done. if we show as a government that we are serious about the question, i think we will get operations. >> you see a pirate partnership than? >> of course. fundamental defense of the united states is a public responsibility. obviously every company wants to protect its own intellectual properties and markets. >> thank you. >> doctor come i can see the wanted to make a comment on that question. so please go ahead. >> i think that this body has an important role to play.

i am sure that many view have seen the rise of certain companies that are now advertising this as part of their services. but they themselves will engage in aggressive defensive measures on behalf of companies in the absence of the u.s. government will do anything to help them. when i testified before the commission, we had a lengthy discussion about how some of the outdated features in the 1986 prodigies act existed and how many companies right now are looking to congress for clarification on all of this is to where the legal boundaries are on this issue about hacking and being able to aggressively go after the intellectual property. that act is 27 years old. i believe the many features of it are outdated and have been overrun by technology and i think it needs to be revisited. that was certainly one of the most interesting debates that we had in the commission hearing

that i testified at. >> as we look at the commission, senator, your comments are that it won't get us all the way. i may be paraphrasing her. how far down the road doesn't get us? are we doing a half marathon? need to realize how far down the road we are going. >> we are talking about all your recommendations are correct. >> i don't think i can quantify that except to say that i think it will be significant. you will be significant to the extent that we have begun to create within china itself, an interest group that is in favor of this situation and handling of it. because we see that in so many areas where there is not bad.

>> by threatening the probability of those public and private companies that sell large amounts of this to the united states. >> windows threaten and consequences to actions -- because too many times we threaten without resolve. and i guess what i'm asking -- >> i agree, don't read unless you're willing to carry out. >> exactly. >> you are seen to have real consequences, regardless of the circumstances of what has been implemented. would you agree? >> well, first, i would say is a matter of principle that china and the chinese economy and government will respect intellectual property when they have their own electoral property to defend. one of the ones that we have is

talking about controlling is very popular these days. i see a tremendous upswing in this in china. in other words, chinese doing patents of things with their own pto and then attempting to coerce american companies are that are in china by claiming that they have these chinese patents for something that clearly is one of our patents. the trends are going in the right direction. but not quickly enough in terms of property development and its own desire for protection. ..

>> it used to be investing in china are rare candor foreign companies got a better deal from the regulatory and incentives in

point* and my understanding is that is no longer the case. the regulations are beefed up so the regulations that the company's fee from america are not as lucrative it a more. would you concur? >> it is slightly too broad because every time a company or investment is the same so it may not have as much with intellectual property. other finding a profitable to do business there but some cost more than it is worth. >> i would probably disagree with the characterization there was the tone where we were successful making money in china my father did business in china with nuclear radiation detectors and thought it was stacked

against him every watch people who came to china every ready bought hot one she would sell half a billion shoes but the hope was always that the chinese economy would return to the plate toch it became a more level playing field and more predictability with the regulatory system. what we're finding now is it is becoming more predatory and capricious as they try to force the indigenous innovation not content to let the western multinationals and that has created a very unweaving playing field and frankly unfair activity that is in violation of the did buteo commitments. >> how big does the problem and need to get the floor there is a demand from the american people? we estimate today a law

estimate of three or 400 billion how much the floors of a conservative effort. >> it is an illustration. >> i yield back. >> average even argue at decade it go when some of the issues are decided in the house and senate that the public was always said of these two institutions but i have watched this from my days in the house with npr with american corporations and relationships in china and at the time i remember i french that said their remorse corporate jets that weeks leading up to the vote

they and 85 in his memory and at that point* i am not sure hour large companies interest in china matched up with our national interest as a nation and i think perhaps it is more that way and a note of caution as american companies, to the governing and say we need help that we keep in mind we should be there for them it is important that we match those because i remember being lobbied that this makes so much sense to pass it then to years later he moved production that all of the competitors there because the new set of rules and that song was sung far too many times and in north carolina in did hayek -- ohio so thank you for your work for your lifetime and

continued working and service for our country. i will call the next panel known more commonly as of watching online campaigns against censorship and was awarded by the french national recognition of his efforts in contribution to promote with the issa to live technology and with the city of human rights and the vice president in ears africa and global programs at the national endowment for democracy where she used -- studied were travel since the tv and the member of this 80 i policy working group ben policy foreign relations with king and the threats of a changing world

and it served of member the bordet of amnesty international and five years was of volunteer from 9399 served two terms of the virginia commission on civil rights and i asked if he would join us and thank you very much. and you also have a translator. please proceed. >> [speaking chinese] >> translator: thank you mr. senator.

i am here to testify about the cyberattacks that occurred over the last few years. >> species became today's. >> translator: september 2009 i discovered that my age e-mail account was set up for for reducing and it would forward all my e-mail as i received to another e-mail account and not under my control. this was the first ever realized that my e-mail was attacked. >> [speaking chinese]

>> translator: february february 2011 and the so-called revolution broke in china and a first city online cause for mass gatherings with public venues in major cities across china and at the time i was working and living in hong kong starting at that time all of my electronic communications including telephone and the internet products and services were under severe attack. >> [speaking chinese]

on june 2nd 2011 i discovered a rather sophisticated hacking was used against my e-mail account. i received the e-mail with the subject we would like you to participate. of the e-mail provided that it disguised on the link in the account would authorize other users to present. when i reported this to google's, they responded they were not even aware of

such attacks. the content of the male has to do with the well-known chinese author for the campaign for the election to local congress of the people's representatives and was sent to days for the -- before the. >>host: massacre june 4th. i believe the hacking was political and most likely enactive the government and i reported the hacking process and published it on you to -- you to the. >> [speaking chinese] >> translator: on june, 2011 with the human rights meeting in geneva was

part of the geneva program i gave a speech for citizens who were persecuted because of the revolution. on june 8 >> [speaking chinese] >> translator: after i gave the speech and before i left it geneva my phone begin to receive a large

volume of incoming calls. my phone was attacked in such a manner between june and august of 2011 and heaviest on july 31st, i received 311 calls in one day. all the calls hung up after the reing and i did a study of the calls between late july and the august and i found that hackers had a very regular time when they start working in when they went off work. it was not a random person acting alone. >> species veejays species speaking chinese speeeighteen in july 2011 my wife and my son

and other relatives were published online including the numbers of my wife and my sons travel permits. this information is not what people can easily access. >> [speaking chinese] >> translator: for about one year starting april april 2011, i identify persons on twitter that had the information using software to filter the trash

i found the heaviest attack took place on april 25, a 2012. a staggering 590,000 spam post within 24 hours and then identified persons also posted a vicious post and defaming me online at the rate of over 10,000 times per day. as far as i know, the office has also been similarly attacked. >> [speaking chinese]

>> translator: starting august 24, 2011 my e-mail account was spam with an astonishing number of messages. in mid march 2012 it was as high as five gigabytes per hour. miss this were a personal attack more than 20 could attack might account simultaneously to reach that volume so therefore it was an organized attack. they also put my name in the

garbage messages to make it harder for me to filter them and i reported it to google through a third-party and a google's offical contacted me and they made specific efforts to deal with the attack on me but to the results were not that great. >> speaking speaking janie's. >> translator: identified persons who published hundreds of articles online and i believe that was an organized campaign to destroy my personal reputation. >> [speaking chinese] >> translator: at

4:00 p.m. attacks on twitter angie mail stop simultaneously this also shows these were organized behavior's. >> spaking speaking chinese. [speaking chinese] >> could you wrap up in the next minute? >> we are just about done. from april 2009 to the present time we received an untold number of females and turgid e-mail sand from the system that i successfully

broken to myself 192 people that were objects of attack included chinese dissidents and foreign journalist reporting in china. and also in the background with the telephone harassment i believe. >> [speaking chinese] >> translator: i hope the u.s. congress and government will recognize cyberattacks against human-rights defenders and persecution and to impose sanctions on the organizations, companies and their employees who engage in such malicious

activities. thank you. >> thank you. >> the chinese and tibetan human rights activist working for exile sever hacking reaches across state boundaries to exercise fundamental political freedoms that we should join in democratic countries and to be under the same cyberattacked it means that they are not able to reduce the access free communication in the public square and the success to hamper the ability of these groups to do their work early results from specific targeting and the use of hacking skills. some examples, first, they have to contend with realtime interference with their communications. and those having misspelled e-mail's they misspelled their own name it is a

giveaway but now they obtain genuine e-mail's to send them on within hours which greatly increases plausibility especially when they're related to the ongoing conversation or upcoming event or conference. i have one example there was at least one incident when a staff member received an immediate reply from a colleague that turned out to be the work of a hacker. >> to talk about the jamming of his telephone it have been to with jamming of the land lines of the office telephone lines in during the same time which was the sensitive political anniversary of the july july 5th riots, the web site was down and there was the massive spam in attack

with 15,000 males and rica and also innovation dealing with this was the first-ever documented attacked now this is getting to the smart phone and the tablets in fact, one research company has issued a report saying in march the first use of spear fishing e-mail to succeed in damaging and jury users equipment. and it did have to do with the league of human rights having sent an e-mail to speakers who attended the conference and the sender of this from a to ben in activist the bellaire attached extracted data about the phone itself and

the phone numbers, the model and the contacts on the phone and call logs and text messages and location. the sophistication of all these attacks reveal the investment of resources and active this note and upgrading is devoted to this campaign including increased knowledge of social network and we should note the nature of the political targeting june 4th in july 5th and others in as we look at the targeted hacking why is it such potent tax six to impede the work of the activist?

because of the practical effects. and then if it compromises the ability to help refugees. >> gan to recover from the of cyberattacks and erases the fighting is accost list back of systems and undermines cooperation of national organizations that the media is frustrated with these fake and malicious e-mail's and hacking interference and it increases see your even for those living in free countries it is making people afraid to be in touch

with each other to have solidarity and other outside of china didn't want to compromise their strategies or the confidential in duration and certainly to communicate with people inside china was the potential for harassment and address. this portfolio of the facts under ranging on negative generating credibility to the panoply of tactics by authoritarian regimes and now globalized is the unqualified condemnation. thank you. >> thank you for your courage to speak out i know you are a new york and i also know you have a wife and son and if you are speaking out does in danger in any way or exposes you to any problems please let us know we will help you in any

way that we can i think is speak for all members of this activity in institutionally please keep us informed of any potential retribution. thank you for that. my question is why didn't they just shut you down? >> [speaking chinese] >> translator: in 2011 i was awarded a human rights award in france and since then i have not been able to return to china and i was working in hong kong so that is why today i am able to sit here to tell you my story.

>> [speaking chinese] >> translator: late last year they refused to renew my a hong kong permit that is why i came to new york. >> thank you. ms. greve it seems that also thank you for your last comments about the training resources and increasing costs to instill fear. is seems a number of u.s. companies are reluctant to speak out because of fear of economic retribution the of the chinese government that they could levy against them. with civil society both inside and outside china, to

talk about the year, explore that a little bit that they may speak out of whatever they might want to do in response? >> the number of groups report with the documentation the witnesses are afraid to speak it is for the cyberage but talky about stealing intellectual property know the you have spoken out your family can suffer so there as it -- is the effect of silence the of individual victims to speak up and it makes it very hard for a journalist for human-rights groups to provide the data and documentation.

>> what u.s. lawmakers do to help these civil court society organizations and human rights groups? >> i believe the work of the national endowment supported by the appropriation is one lifeline. we do grant those that do their best and they have many to have the ability to travel to each other so some kind of offsetting of the financial cost cowhide is the least done to my organization to help human rights defenders and certainly the voices of those in china not just impeded of the normal work but also under the security apparatus when they raise their voices it is very gratifying to be recognized

with the justice of their cause. >> doesn't always matter when we walked the line to judge others speaking at all and does that sometimes jeopardize people whom we defend individually in support of a chinese citizen? does that cut both ways and is that something we should always do? doesn't always help them? >> it is a good idea to ask. the individual or advisers but most of the time time, activist tell us when they're ready to stand up and be counted, it can only help them to have solidarity around the world based on universal values after all. >> thank you mr. chairman. the key for your testimony i

would like to get some idea that of what is enforced against the chinese citizens to expose human rights and how they're targeted in china. >> [speaking chinese] >> translator: the internet hacking cybersecurity is only one problem they face. in real life their problem

is there physical security it appears the internet ability could be invaded and it could be monitored. so on and so forth with. >> five day pervasive across the country? doesn't matter where in china? >> [speaking chinese]

>> translator: the internet attacking is probably the most prominent and they are suffering more but e-mail like fishing is very common and widespread and as for disappearance there might be of middle difference in some provinces it may be a little bit from elsewhere but also very common. >> faq as it relates to religious practices can you see there is greater openness and more than others with the officials church, is it demanded with

the underground church to living greater freedom in some areas? [speaking chinese] [speaking chinese] >> translator: as far as i knew just the greater northern area internal religious persecution is very, very serious.

of course, , all know what happens but in the southern province religious persecution may be a little more mild but it depends on what your standard is. if this is universal values with the persecution even them milder provinces are still very severe. >> thank you for your testimony. as relates to these organizations, you said to appreciate the support of our government and i find myself in a predicament sometimes while addressing the chinese chamber i have spoken to and others and how director i am and i know

general brown offered some but how like to get a better feel how you could counsel me to address the human rights issues and concerns to -- so i could have the greatest impact. my challenge has been to be understanding with 25 years of experience to work with the underground church in that country and the appreciation for what they have gone through. and i want to be directed as i can without losing them in the discussion and my argument has been that people of faith are the most dependable and moral and ethical people that they could be constructed inside their own government given the reports of pervasive problems with crime and other issues inside of

government so i think alan like more input how you help us as legislators to bring better focus and light to this issue to put pressure on the chinese government. >> even the work of this commission approves there is extensive detailed undeniable all documentation and the court is just fall yet to release the exposure does not bring the facts to the forefront so with the opportunity sometimes people come from china are not aware are sometimes believe active government propaganda forces outside china who need this the spear the good name of china but i think the column repetition of back sass to have a place in

the work of documentation has a role and also the question of the long term or the short term you don't get the media response but you have to stand for what is right long term a. >> figure mr. chairman the time is late so i will be brief i have been in a number of hearings where we have heard about human rights abuses in china as it continues and comet ms. greve if you could comment we understand when congress takes an active role under guidance of the chairman or others, when we say we will not tolerate human rights abuses committed does not necessarily change its but those that are suffering suffer less when may highlight it. is there a time coming instead of a threat, we

truly mean what we say in on not tolerate those abuses that are commonplace but when we highlight its, does it become less in china? >> numerous prisoners and said how important it was political leaders and people in charge of their institutions knew that other people were speaking up on their behalf improved treatment and health and so on and of course, has passed to come with commercial rule of law of the transformation of chinese society and this is where the long-term change will come and the american institutions and of for liberty and universal values by itself cannot change the situation is passed to come from within china and i believe it should be to invest as much as possible to strengthen

those who have the right principles and you are in a position to ship the institution to have the greatest french chef for those people for the sake of the future of china. >> but that message be one we will not yield and tell this is dealt with a and i yield back. >> the record will stay open for one week if any panelist as anything you want juice segment and we may have written questions if you could dance to those as quickly as possible and thank you for speaking out and for being here. [inaudible conversations]